Health Care’s First Patient – Profitability

It cannot be a surprise to anyone that health care in America is a profit-oriented enterprise; and the reason for this should be, but apparently isn’t, obvious.

The reason is that in America we recognized that profit was essential to the freedom that we demand in our society. No one has the right to set the price that I will agree to place on anything that I value, except me. You cannot make me sell crops, livestock, labor, product or talent for a price that you choose. I can insist that you recompense me for a value that I choose; and which you freely agree to pay. Or you can walk away and go to someone else, or chose to forego the purchase.

Another name for profit in this context is self-interest. The tenet here is that profit is the value that I add to the work and/or property that I am seeking to use to directly benefit me. In the case of my time or talent, if I sell you my effort then I expect I will receive a value for it that is greater than what it costs me to provide. It may be difficult to see and to quantify the costs of my time to myself, but ultimately I need to be better off for having done the work than for not having done it. If I am selling some property of mine, I also need to cover my costs and there is no reason to sell the property if I am not receiving some additional value above what it cost me and any appreciation in value that it would cost me to replace it. Further, if I don’t make some profit above that personal cost then there is no self-interest for me to sell it.

Well the health care system requires the same motivational push. The system cannot operate and survive if it is not driven by profit and its corollary self-interest. Besides, without profit the advances and resulting benefits would not be forthcoming. Consider the players in the system, which of them are not motivated by profit? At the heart of the system are the physicians; they have chosen medicine as their profession. This is how they make their livings; and that is their profit. They make enough to pay for all their costs, plus enough to provide food, shelter, transportation, their offices, payments on their student loans, and everything else they seek as part of their lifestyle. It even covers their taxes. And as we all know, they make livings, all on the profits from their work.

Hospitals, insurance companies, pharmaceuticals, elder care centers, and medical equipment manufacturers are all involved in offering their time and property in the pursuit of making a profit. Even the non-profits are seeking profits, it’s just that they are profiting in a non-traditional business manner. They are not making money for the company, they are making it for the officers and operators of the organization.

This is not a bad thing, it is what made our health care system the best in the world. The problem in the health care system today, is not that these companies are seeking a profit. The problem is that they are being driven to find their profit in completely irrational ways. Ways that are usually promoted by the legislative and regulatory environments that have grown up to administer that they are meeting the laws passed to serve the public. Even if those laws and policies are doing more damage than good. So given the terminal illness that governmental management has inflicted upon the U.S.’s health care system the treatment to cure the system must recognize the criticality of restoring a healthy and robust profit motive to the system. And by a healthy profit motive, I do not mean the government should use the failed and irrational methods that they always use to insure profitability of an industry that they interfere in.